Exhibit 10.1


 


CONSULTING
AGREEMENT


 


THIS
AGREEMENT made as of June 19, 2008


 


BETWEEN:


 


WORLD HEART INC.


7799 Pardee Lane – Oakland, CA 
94621


(Hereinafter referred to as “WorldHeart” or the “Corporation”)


 


OF THE FIRST PART,


 


and


 


Pellone
Enterprises Incorporated


(Hereinafter referred to as the “Consultant”)


 


OF THE SECOND PART


 


WHEREAS WorldHeart
carries on a business consisting principally of the research, development and
commercialization of medical devices (the “Business”);


 


AND
WHEREAS WorldHeart is desirous of retaining the Consultant to
provide consulting services in connection with the Business, on the terms and
subject to the conditions herein set out;


 


AND
WHEREAS the Consultant is desirous of providing such services
to WorldHeart, on the terms and subject to the conditions herein set out;


 


NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the respective covenants and agreements of the parties contained herein, it is
agreed as follows:


 


ARTICLE ONE -
CONSULTING SERVICES


 


1.1            Services.      WorldHeart hereby agrees to retain the
Consultant to provide WorldHeart with consulting services consisting of the
review of specifications and other materials for the purpose of providing
written feedback as specified in Appendix A, and such other consulting services
as WorldHeart and the Consultant may from time to time agree upon (the “Services”),
and the Consultant hereby agrees to provide the Services to WorldHeart.


 


1.2            Term of Agreement.      This Agreement shall
remain in full force and effect from July 2, 2008 until the earlier to
occur of such time as the Services are completed as prescribed by Appendix A or
the End Date specified by Appendix A (the “Term”), subject
to earlier termination as provided in Article Four hereof, with the Term
being capable of extension by mutual written agreement of the parties hereto.


 


1.3            Provision of Services.      It is agreed and acknowledged that the
Consultant may from time to time provide services to other persons, firms and
corporations, provided that the Consultant shall at no time during the Term
provide services to any competitor of the Corporation that is not an Affiliate
(for this purpose, “Affiliate” shall mean any person, firm or corporation that
is affiliated with WorldHeart 


 


1

















 


within the meaning of the Business Corporations Act
(Ontario) and World Heart Corporation).


 


1.4            Remuneration.      In consideration for the Services
rendered by the Consultant hereunder, the Corporation shall pay to the Consultant
the consulting fee prescribed in Appendix A. 
The consulting fee shall be paid at the completion of predetermined
milestones as established in Appendix A.


 


1.5            Expenses.      The Consultant shall be reimbursed from
time to time for all pre-approved out of pocket expenses, including travel
costs of up to 1 day travel per site, actually and properly incurred by the
Consultant in connection with providing the Services hereunder.  The Consultant shall furnish receipts,
statements and vouchers to the Corporation for all such expenses.


 


ARTICLE TWO – CERTAIN AGREEMENTS


 


2.1            Services to be Rendered Personally.     The Consultant shall provide the Services
personally except as otherwise expressly agreed to in advance in writing by the
Corporation and the Consultant.


 


2.2            Provision of Amenities.    WorldHeart shall not provide, for the use
of the Consultant, any equipment, tools or amenities.


 


2.3            Business Insurance.    Consultant will maintain adequate insurance
to protect the Corporation from the following: (a) claims under worker’s
compensation and state disability acts; (b) claims for damages because of
bodily injury, sickness, disease or death which arise out of any negligent act
or omission of Consultant; and (c) claims for damages because of injury to
or destruction of tangible or intangible property, including loss of use
resulting there from, which arise out of any negligent act or omission of
Consultant.


 


Without limiting the
foregoing, Consultant shall maintain the following minimum insurance coverage:


 


A.           Commercial
General Liability Coverage:


·                  $1,000,000
each occurrence for Bodily Injury, Property Damage


·                  $2,000,000
General Aggregate per location / per project


·                  $2,000,000
Products / Completed Operations Aggregate


·                  $1,000,000
Personal Injury coverage


 


The Consultant’s
Commercial General Liability policy shall be endorsed to include World Heart,
Inc as an additional insured.


 


Where applicable and
depending upon the scope of the work described in the agreement, World Heart, Inc.
may require the Consultant to provide the following insurance coverage:


 


B.             Workers
Compensation & Employers Liability Coverage


A.           Statutory
Workers Compensation Coverage


B.             Employer’s
Liability Coverage for the following limits:


·                  $100,000
each accident – Bodily Injury by Accident


·                  $100,000
each employee – Bodily injury by Disease


·                  $100,000
policy limit – Bodily Injury by Disease


 


C.             Errors
and Omissions or Professional Liability


·                  $1,000,000
Each Claim / Aggregate covering negligent acts errors or omissions for claims
arising from the Consultants scope of activities as specified in the Agreement


 


D.            Automobile Liability Coverage with limits of coverage
of $300,000 each accident for bodily injury or property damage


 


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Prior to
commencing work under this agreement, Consultant shall deliver to the
Corporation certificates of insurance evidencing the insurance required under
this Agreement.  The certificate shall
include an additional insured endorsement as respects Commercial General
Liability coverage and specify 30 days notice of cancellation.


 


In the
event that the Consultant does not obtain the foregoing insurance coverage,
WorldHeart may in its sole discretion obtain coverage on behalf of the
Consultant. Consultant understands and agrees that Consultant shall be
responsible for all costs of insurance coverage obtained by WorldHeart on
Consultant’s behalf as established in Appendix A.


 


2.4 Due Organizations.     The Consultant is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.


 


2.5            No Conflicting Obligations.  The Consultant represents and agrees that the
Consultant is not subject to any contract or agreement (written or oral), law,
judgment, order or decree of any kind, any agreement or other obligation to
keep confidential the proprietary information of any of the Consultant’s
current or former clients or employers or any other third party or any restrictive
agreement or covenant of any character that restricts the Consultant’s ability
to perform the Services, or that conflicts with, or would or may be breached by
the performance of the Services or the execution and performance of this
Agreement.  The Consultant represents and
agrees that the Consultant shall not use in the performance of the Services any
trade secrets, confidential information, other proprietary information or
intellectual property rights of any of the Consultant’s current or former clients
or employers or any other third party. 
The Consultant represents and agrees that in the performance of any
Services involving the creation of Developments (as hereinafter defined) the
Consultant shall not infringe or misappropriate the intellectual property
rights of any third party.


 


ARTICLE
THREE – CONFIDENTIALITY AND CERTAIN OTHER COVENANTS


 


3.1            Confidential
Information and Trade Secrets. 
“Confidential Information” shall include, but not be
limited to, Developments, any products (including, without limitation, any and
all versions of products and related documentation) owned or marketed by
WorldHeart; all discoveries, concepts, ideas, production methods, techniques,
systems, devices, designs and drawings, know-how, computer programs,
algorithms, data bases, formulae, processes, compositions, ingredients,
research, inventions, improvements, modifications, and enhancements of
WorldHeart; business matters and information regarding WorldHeart’s business
operations, methods and practices, such as marketing strategies, product
pricing, margins, staff remuneration, information regarding WorldHeart’s
financial affairs, plans, books, customers and customer requirements, products,
prices, costs, discounts, sales, inventories and properties of WorldHeart; the
names of WorldHeart’s clients, customers and suppliers, and the nature of
WorldHeart’s relationships with such clients, customers and suppliers;
technical and business information of or regarding WorldHeart’s clients or
customers obtained in order for WorldHeart to provide such clients or customers
with WorldHeart’s products and services, including, without limitation,
information regarding product requirements and the business operations, methods
and practices and product plans of such clients and customers; and any other
proprietary information in the possession or control of WorldHeart, or any
other knowledge or information concerning WorldHeart, that Consultant learns in
the course of performing the Services or from WorldHeart, its directors,
officers, or employees.  “Trade Secrets”
include, but shall not be limited to, all Confidential Information on which
WorldHeart has spent money, time or effort to develop and which WorldHeart
desires to keep confidential, without regard to whether such ideas and information
are novel, inventive or patentable or may have been anticipated, and trade
secrets as defined under the laws of any applicable jurisdiction.  As used in this Article Three, “WorldHeart”
shall mean World Heart Corporation and each of its direct and indirect parents,
subsidiaries and affiliates.


 


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3.2            Developments
“Developments” shall include all inventions, devices, discoveries, concepts,
ideas, works, works in progress, algorithms, formulae, know-how, processes,
techniques, programs, methods, compositions, articles, machines, systems,
enhancements, modifications, and improvements, whether or not patentable,
copyrightable or protectable as trade secrets, developed, created, conceived,
generated or reduced to practice by the Consultant alone or jointly with
others, which relate to the activities of WorldHeart during the engagement by
WorldHeart of the Consultant or which relate to or result from the Services or
tasks performed by the Consultant under this Agreement or which result from the
use of the premises or property (including equipment, supplies, or other
Confidential Information) owned, leased or licensed by WorldHeart, regardless
of when the Development occurred.


 


3.3            Treatment
of  Confidential Information.     At all times, during and after the Term in
perpetuity, the Consultant (a) shall not disclose Confidential
Information; (b) shall take reasonable precautions to prevent unauthorized
disclosure of Confidential Information, including, but not limited to, blocking
access to Confidential Information by any person other than individuals
authorized by WorldHeart or WorldHeart employees reasonably required to perform
the Services; (c) shall not copy or reproduce, in digital or non-digital
form, any tangible expression of Confidential Information except as may be
reasonably necessary to perform the Services; (d) shall not, without the
prior written consent of WorldHeart, use any Confidential Information in any
manner, including, but not limited to, creating, maintaining, marketing,
patenting or otherwise protecting, or aiding in the creation, maintenance,
marketing, patenting or otherwise protecting any product which is competitive
with any product owned or marketed by WorldHeart, except as reasonably required
to perform the Services.


 


3.4            Ownership of Confidential Information; Developments.  The Consultant agrees to make full disclosure
to WorldHeart of each Development promptly after its creation.  WorldHeart shall be the exclusive owner of
all right, title, and interest in and to each Development throughout the world,
including, without limitation, all Trade Secrets, patent rights, copyrights,
moral and economic rights of authors and inventors (however denominated), and
all other intellectual property rights (including rights of renewal and
extension) therein (together with any goodwill associated therewith, “Intellectual
Property”).  The Consultant shall not
acquire any right, title or interest in or to any Development.  To the extent that the Consultant retains any
right, title or interest in or to any Developments, notwithstanding the
provisions of this Section 3.4, the Consultant hereby irrevocably and
perpetually assigns to WorldHeart all right, title and interest in and to such
Developments (and all Intellectual Property embodied therein), which assignment
shall not lapse under the laws of any applicable jurisdiction.  The Consultant shall cooperate fully at all
times during and subsequent to the Term to effectuate this assignment,
including but not limited to (a) executing any documents that WorldHeart
deems reasonably necessary for transfer and assignment, (b) doing such
acts and other things reasonably requested by WorldHeart to confirm such
transfer and assignment, including, but not limited to, obtaining patents or
copyrights, and (c) doing such acts and other things reasonably requested
by WorldHeart to register and renew copyrights. 
The Consultant’s obligations set forth in this Section 3.4 shall
survive the expiration or termination of the Term.  If applicable, the Consultant hereby waives in
whole the Consultant’s right to the integrity of the Developments or any other
moral right, including, without limitation, the right to restrain or claim
damages for any distortion, mutilation or other modification of the
Developments in any context and in connection with any product, service, cause
or institution.


 


3.5            Return of Property.     Upon the request of WorldHeart, and, in
any event, upon the expiration or termination of the Term, the Consultant shall
immediately return to WorldHeart all materials acquired in the course of
providing Services to WorldHeart, including, but not limited to, (a) any
tangible expression that contains Confidential Information, or any copy or
reproduction, in digital form or otherwise, of such an expression, (b) all
Developments and (c) any other property of WorldHeart.


 


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3.6            Non-solicitation.  The Consultant shall not,
during the Term and for a period of two (2) years immediately following
the termination of the Term, or any extension of it, for any reason, either
directly or indirectly:  (a) call
on, solicit, or take away any of WorldHeart’s customers or potential customers
about whom the Consultant became aware as a result of the Consultant’s services
to WorldHeart, either for the Consultant or for any other person or entity, or
in any way request, suggest or advise any such customer to withdraw or cancel
any of their business with WorldHeart or refuse to continue to do business with
WorldHeart; or (b) solicit or take away or attempt to solicit or take away
any of WorldHeart’s employees or contractors either for the Consultant or for
any other person or entity.


 


3.7            Non-disparagement.  The Consultant agrees that the Consultant shall
not (except as required by law) directly or indirectly make any statement or
release any information, or encourage others to make any statement or release
any information that: (a) embarrasses or criticizes WorldHeart, or (b) in
any way adversely affects or otherwise maligns the business or reputation of
WorldHeart.


 


3.8            Irreparable
Harm.  In the event
of the breach or threatened breach of this Article Three by the
Consultant, the Consultant acknowledges that WorldHeart would have no adequate
remedy at law and, in the event of such breach, WorldHeart would be irreparably
harmed and shall, therefore, be entitled to injunctions, both preliminary and
final, enjoining and restraining such breach or threatened breach.  Such remedies shall be in addition to all
other remedies available at law or in equity including WorldHeart’s right to
receive from the Consultant any and all damages that may be sustained as a
result of the Consultant’s breach of contract. 
The Consultant waives any requirement for the securing or posting of any
bond in connection with such remedies.


 


ARTICLE
FOUR - TERMINATION


 


4.1            Termination of
Agreement.   
WorldHeart may terminate this Agreement and the Term by giving the
Consultant sixty (60) days’ written notice. 
The Consultant may terminate this Agreement and the Term by giving
WorldHeart [sixty (60) days’] written notice. 
This Agreement also may be terminated prior to the expiration of the
Term in the event of the Consultant’s death or disability.  For purposes of this Agreement, the
Consultant shall be considered disabled if the Consultant becomes incapacitated
by reason of sickness, accident or other physical or mental disability and
shall, in good faith opinion of WorldHeart, thereby be unable to perform the
Consultant’s duties hereunder.  The
Consultant shall only be entitled to the consulting fee, or applicable portion
thereof, in respect of the milestones set forth in Appendix A that are
completed, or, as applicable, partially completed, through the date of
termination of the Term, as determined by WorldHeart.  The obligations of the Corporation and the
Consultant shall terminate upon termination of this Agreement or termination or
expiration of the Term; provided,
however, that the obligations of
the Consultant pursuant to Article Three and Section 5.3 hereof shall
survive the termination or expiration of this Agreement.  Without limiting the foregoing, the
Consultant acknowledges and agrees that all of the Consultant’s rights to any
consulting fee (other than consulting fee earned through the date of
termination of the Services as determined pursuant to this Section 4.1),
shall cease upon expiration of the Term or termination of the Services or this
Agreement.


 


ARTICLE
FIVE – CAPACITY; INDEMNIFICATION


 


5.1            Capacity of Consultant.    It is acknowledged by the parties hereto
that the Corporation is retaining the Consultant in the capacity of independent
contractor and not as an employee of the Corporation.  The Consultant and the Corporation
acknowledge and agree that this Agreement does not create a partnership, joint
venture, agency or employer/employee relationship between them or their
affiliates for any purpose, including, without limitation, any employee benefit
plans or arrangements or fringe benefit plans or programs or payroll practices
or employment tax obligations applicable to 


 


5

















 


employees
of the Corporation or its subsidiaries or affiliates.  Accordingly, the Corporation shall not
supervise, control or direct the manner or means by which the Consultant
performs the services hereunder, and the Consultant shall have no authority to
act for or on behalf of the Corporation or to contractually bind the
Corporation without the Corporation’s express written consent.


 


5.2            No Corporation Employee Benefits or Insurance; Taxes.    The Consultant and the Corporation agree
that the Consultant shall not be entitled to participate in any employee
benefit plans or arrangements or fringe benefit plans or programs or payroll
practices maintained or contributed to by the Corporation or its subsidiaries
or affiliates for their employees.  The
Consultant acknowledges and agrees that the Consultant voluntarily waives the
right to participate in such plans, arrangements, programs and practices, and that
such waiver shall continue in full force and effect even if the Consultant is
retroactively deemed to be an employee of the Corporation or any of its
subsidiaries or affiliates by a court of competent jurisdiction or regulatory
authority.  The Corporation shall not
carry any workers’ compensation, general liability, or health or accident
insurance to cover the Consultant nor pay any amounts on account of the
Consultant for purposes of Social Security or social insurance, unemployment
insurance or federal, state or local withholding, employment or income taxes
and shall not provide any other contributions or benefits on account of the
Consultant which might be required or customary in connection with an
employer-employee relationship.  The
Consultant shall be responsible for all source deductions, pension,
unemployment insurance and other taxes or levies and other obligations referred
in the immediately preceding sentence. 
The Consultant shall remit and otherwise satisfy in full when due all
such source deductions and other taxes, levies and obligations required by law.


 


5.3            Indemnification.    The Consultant agrees to indemnify and hold
harmless the Corporation and its subsidiaries and affiliates, and their
respective directors, officers and employees, from and against any losses,
taxes, penalties, interest, liabilities, costs, claims, damages and expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
to which the Corporation, or any such subsidiary, affiliate, director, officer
or employee, shall be subject, or for which any of them shall be liable,
arising out of or relating to (i) the Consultant’s breach of this
Agreement, including, without limitation, any breach of the Consultant’s
representations, warranties and covenants contained in this Agreement; (ii) any
action or omission to act by the Consultant or any partner, employee, agent,
affiliate or representative of the Consultant in connection with the
performance of the Services and the Consultant’s obligations under this
Agreement; (iii) any amounts which the Internal Revenue Service and/or any
state or local tax authority claims should have been withheld by the
Corporation from monies paid to the Consultant in accordance with this
Agreement or otherwise paid on account of the Consultant; or (iv) reclassification
of the Consultant as an employee of the Corporation or its subsidiaries or
affiliates or a determination that the Corporation or any such subsidiary or
affiliate shall be considered the employer of the Consultant for any purpose.


 


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ARTICLE
SIX - GENERAL CONTRACT PROVISIONS


 


6.1          Notices.    
All notices, requests, demands or other communications (collectively, “Notices”)
by the terms hereof required or permitted to be given by one party to any other
party, or to any other person shall be given in writing by personal delivery or
by registered mail, postage prepaid, or by facsimile transmission to such other
party as follows:


 


	
  (a) To WorldHeart
  at:

  	
   

  	
  World Heart Inc.

  
	
   

  	
   

  	
  7799 Pardee Lane

  
	
   

  	
   

  	
  Oakland, CA 94621

  
	
   

  	
   

  	
  Telephone: (510)
  563-5000

  
	
   

  	
   

  	
  Facsimile: (510)
  563-5003

  
	
   

  	
   

  	
  Attention: Monica
  Lippis

  
	
   

  	
   

  	
   

  
	
  (b) To the
  Consultant at:

  	
   

  	
  312 San Mateo Drive

  
	
   

  	
   

  	
  (b) To the
  Consultant at:

  
	
   

  	
   

  	
  Menlo Park, CA 94025

  
	
   

  	
   

  	
  Telephone: (650)
  328-0417

  
	
   

  	
   

  	
  Facsimile: none

  



 


or at such other address
as may be provide to the other party hereto, in writing, from time to time.


 


All such notices shall be
deemed to have been received when delivered or transmitted, or, if mailed, 48
hours after 12:01 a.m. on the day following the day of the mailing
thereof.  If any Notice shall have been
mailed and if regular mail service shall be interrupted by strikes and other
irregularities, such Notice shall be deemed to have been received 48 hours
after 12:01 a.m. on the day following the resumption of normal mail
service, provided that during the period that regular mail service shall be
interrupted all Notices shall be given by personal delivery, courier or by
facsimile transmission.


 


6.2          Counterparts. 
This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original and such counterparts together shall
be but one and the same instrument.


 


6.3          Time of the Essence.    
Time shall be of the essence of this Agreement and of every part hereof
and no extension or variation of this Agreement shall operate as a waiver of
this provision.


 


6.4          Entire Agreement.    
This Agreement constitutes the entire agreement between the parties with
respect to all of the matters herein, and its execution has not been induced
by, nor do any of the parties rely upon or regard as material, any
representations or writings whatever not incorporated herein and made a part
hereof and may not be amended or modified in any respect except by written
instrument signed by the parties hereto. 
Any Appendices referred to herein are incorporated herein by reference
and form part of this Agreement.


 


6.5          Successors
and Assigns; Binding Effect.   
The Services are of a unique and specialized nature, to be rendered by
the Consultant as described in Articles One and Two hereof in reliance upon the
Consultant’s unique knowledge and experience. 
Consequently, this Agreement and all rights and obligations hereunder
are personal to the Consultant, and the Consultant shall not assign the
Consultant’s interest in, or delegate the Consultant’s duties under, this
Agreement, except with the express prior written consent of the Corporation,
and any purported assignment in violation hereof shall not be valid or binding
on the Corporation.  Notwithstanding any
other provisions of this Agreement to the contrary, the Corporation may assign
this Agreement to any person without the consent of the Consultant.  This Agreement shall inure to the benefit of
and be binding upon the parties and their respective legal personal
representatives, heirs, executors, administrators, successors or permitted
assignees.


 


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6.6          Currency.    
Unless otherwise provided for herein, all monetary amounts referred to
herein shall refer to the lawful money of the United States.


 


6.7          Headings for Convenience
Only.     The division of this Agreement into
articles and sections is for convenience of reference only and shall not affect
the interpretation or construction of this Agreement.


 


6.8          Governing Law.    
This Agreement shall be governed by and construed in accordance with the
laws of the State of [California] and the federal laws of the United States
applicable therein and each of the parties hereto agrees irrevocably to conform
to the non-exclusive jurisdiction of the Courts of such State.


 


6.10        Severability.    
If any Article, Section or any portion of any Section of this
Agreement is determined to be unenforceable or invalid for any reason
whatsoever that unenforceability or invalidity shall not affect the
enforceability or validity of the remaining portions of this Agreement and such
unenforceable or invalid Article, Section or portion thereof shall be
severed from the remainder of this Agreement.


 


6.11        Execution of Agreement -
Transmission by Facsimile.     The
parties agree that this Agreement may be transmitted by facsimile or such
similar device and that the reproduction of signatures by facsimile or such
similar device will be treated as binding as if originals and each party hereto
undertakes to provide each and every other party hereto with a copy of this
Agreement bearing original signatures forthwith upon demand.


 


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IN
WITNESS WHEREOF
the parties have duly executed this Consulting Agreement this Nineteenth day of
June, 2008.


 


 


	
   

  	
    Name of Consultant

  
	
   

  	
   

  
	
   

  	
  /s/ David Pellone

  
	
   

  	
  Pellone Enterprises
  Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  68-0326140

  	
   

  
	
   

  	
  Taxpayer Identification
  Number

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WORLD HEART INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Jal S. Jassawalla

  
	
   

  	
   

  	
  Jal S. Jassawalla

  
	
   

  	
   

  	
  CEO & President

  
				



 


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APPENDIX A


To
the


Consulting
Agreement


Between


World
Heart Inc.


and


Pellone
Enterprises Incorporated


 


Description
of Services:  Management of financial
staff and related financial expertise to meet SEC reporting requirements and
other funding documentation as needed; it includes agreeing to be the legally
acting CFO and signing in that capacity.


 


End Date:  9/30/08


 


Consulting fee: $150.00
per hour


 


Other
conditions/arrangements:  Invoices weekly
and paid within 10 day


 


The total consulting fee
shall not exceed $50,000.00 but any balance of that amount not paid prior to
the End Date shall be paid to Consultant if this Agreement is terminated
pursuant to paragraph 4.1 and without cause.


 


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